One month after JPM’s head quant Marko Kolanovic warned that volatility is about to return and could lead to “accidents”, the market timer also called “Gandalf” elsewhere for his prognosticative skills is out with a fresh warning, predicting “market weakness in the near-term” adding that he is cautious and urging clients to hedge equities.

Specifically, Kolanovic says that his key concern is a rise in uncertainty surrounding the French elections next month. “On our Global Markets conference in Paris last week, a survey of clients showed that only ~20% think that Le Pen may win (vs. 60% for Macron). Further complacency may set in in the aftermath of the Dutch elections yesterday, and US Equity markets (e.g. VIX) price virtually no event risk related to French election” to which he counters that “we maintain that the increase in volatility will continue.”

But wait, if everyone expects a crash is one guaranteed not to happen? This is his response: “near-term, market weakness is more likely than not. Clients have asked us ‘if everybody expects a correction, does that mean that it will not happen?’ Possibly, but our survey of clients last week shows that only 17% of them expect a correction.”